Category Archives: Economy

State Film Production Incentives and Programs

Source: National Conference of State Legislatures (NCSL), April 12, 2016

From the summary:
….Most states’ policymakers walk a fine line and try to balance film production incentives in ways that limit forgone revenue, yet still reduce the chances of losing the state’s film industry to competing incentive programs. Since 2009, 10 states have ended their incentive programs. Most recently, growing budget deficits or unclear economic benefits caused Michigan, New Jersey, and Alaska to cut their incentive programs. No additional states have introduced programs since Nevada in 2014. However, Kentucky, Maryland, and California have expanded or extended their programs to better compete with other states’ film industries…..

Overall, states are increasing evaluation and oversight of film incentive programs. A number of states have performed a cost benefit analysis of their film incentive program, or require an audit before a production can receive a rebate or credit. At least 55 percent of all states offering incentives now require an audit or other verification from production companies. This percentage has increased from 38 percent in 2014…..

2015 NPS Visitor Spending Effects Report: Economic Contributions to Local Communities, States, and the Nation

Source: Catherine Cullinane Thomas and Lynne Koontz, U.S. Department of the Interior, National Park Service and the U.S. Geological Survey, Natural Resource Report NPS/NRSS/EQD/NRR—2016/1200, April 2016

The National Park Service (NPS) manages the Nation’s most iconic destinations that attract millions of visitors from across the Nation and around the world. Trip-related spending by NPS visitors generates and supports a considerable amount of economic activity within park gateway communities. This economic effects analysis measures how NPS visitor spending cycles through local economies, generating business sales and supporting jobs and income.

In 2015, the National Park System received over 307.2 million recreation visits. NPS visitors spent $16.9 billion in local gateway regions (defined as communities within 60 miles of a park). The contribution of this spending to the national economy was 295 thousand jobs, $11.1 billion in labor income, $18.4 billion in value added, and $32.0 billion in economic output. The lodging sector saw the highest direct contributions with $5.2 billion in economic output directly contributed to local gateway economies nationally. The sector with the next greatest direct contributions was the restaurants and bars sector, with $3.4 billion in economic output directly contributed to local gateway economies nationally…..

Related:
Visitor Spending Effects
Source: U.S. Department of the Interior, National Park Service and the U.S. Geological Survey, 2016

This interactive tool is a collaboration between the NPS and the U.S. Geological Survey and displays results from the Visitor Spending Effects report series. Economic contributions of NPS visitor spending are displayed at the national, state, and local levels.

The Inequality Multiplier

Source: Mauro Gallegati, Simone Landini, Joseph E. Stiglitz, Columbia Business School Research Paper No. 16-29, April 18, 2016

From the abstract:
That of the multiplier is a largely debated issue. Several studies propose estimates for it. This paper answers the question of how inequality affects the value of the multiplier. The proposed formulation is analytically derived from the Lorenz curve of income by means of Zanardi asymmetry index. Since the relationship between inequality and multiplier is found to be negative, it can be argued that greater inequality has depressive effects on GDP.

Economic Perspectives on Incarceration and the Criminal Justice System

Source: White House, Council of Economic Advisors, April 2016

Calls for criminal justice reform have been mounting in recent years, in large part due to the extraordinarily high levels of incarceration in the United States. Today, the incarcerated population is 4.5 times larger than in 1980, with approximately 2.2 million people in the United States behind bars, including individuals in Federal and State prisons as well as local jails. The push for reform comes from many angles, from the high financial cost of maintaining current levels of incarceration to the humanitarian consequences of detaining more individuals than any other country.

Economic analysis is a useful lens for understanding the costs, benefits, and consequences of incarceration and other criminal justice policies. In this report, we first examine historical growth in criminal justice enforcement and incarceration along with its causes. We then develop a general framework for evaluating criminal justice policy, weighing its crime-reducing benefits against its direct government costs and indirect costs for individuals, families, and communities. Finally, we describe the Administration’s holistic approach to criminal justice reform through policies that impact the community, the cell block, and the courtroom.

Where Did the Government Jobs Go?

Source: Annie Lowrey, New York Times Magazine, April 27, 2016

Long a ticket to the middle class, especially for African-Americans, they have become increasingly difficult to find. ….

….The public sector has long been home to the sorts of jobs that lift people into the middle class and keep them there. These are jobs that have predictable hours, stable pay and protection from arbitrary layoffs, particularly for those without college or graduate degrees. They’re also more likely to be unionized; less than 7 percent of private-sector workers are represented by a union, while more than a third of those in the public sector are. In other words, they look like the blue-collar jobs our middle class was built on during the postwar years.

The public sector’s slow decimation is one of the unheralded reasons that the middle class has shrunk as the ranks of the poor and the rich have swollen in the post-recession years. This is certainly true in Louisiana, where five of the 10 biggest employers are public institutions, or health centers that in no small part rely on public funds. In Rapides Parish, which includes Pineville, the biggest employer is the school district.

Across the country, when public-sector workers lose their jobs, the burden disproportionately falls on black workers, and particularly women — people like Theresa Jardoin and Linette Richard….

Better Incentive Information: Three strategies for states to use economic development data effectively

Source: Pew Charitable Trusts, Issue Brief, April 2016

From the overview:
Economic development incentives are one of the primary tools states use to try to strengthen their economies. Every state uses a mix of tax incentives, grants, and loans in an effort to create jobs, encourage business expansions, and achieve other goals. Collectively, states spend billions of dollars a year on incentives, which can significantly affect their budgets, businesses, and economies.
To make these programs work as well as they can, states need good data. Data are necessary for officials to administer incentives and measure their effectiveness.

There are multiple sources of these data. Relevant information can come from businesses, federal records, and other third-party databases. In fact, states already possess, in some form, much of the data they need. But they must ensure that the right people have access to these data; the information needs to be of high quality and analyzed effectively. Many states have struggled with these challenges, leaving officials without the information they need to administer incentives well and policymakers unsure of whether the programs are working as intended.

To identify solutions, The Pew Charitable Trusts partnered with the Center for Regional Economic Competitiveness (CREC) to create the business incentives initiative in 2014. Through the initiative, cross-agency work groups from Indiana, Maryland, Michigan, Oklahoma, Tennessee, and Virginia worked closely with Pew and CREC to provide in-depth access to their economic development oversight and management procedures. While the initiative focused primarily on these six states, Pew and CREC also convened stakeholders from 22 additional states. The initiative built on Pew’s ongoing work to help states establish processes to regularly and rigorously evaluate the results of their tax incentives.
From March 2014 to December 2015, Pew conducted numerous interviews and site visits with participating states’ elected lawmakers and economic development, tax, and budget officials in the legislative and executive branches. The six states reviewed their incentive policies and practices to identify possible strengths and weaknesses, and received technical assistance from Pew to design and implement policy improvements.

The business incentives initiative provided strategies on how states can:
• Share relevant data.
• Ensure data are high-quality.
• Analyze data effectively.

Earned Sick Leave for All Would Help New Jersey’s Workers & Boost its Economy: For businesses, modest costs outweighed by likely savings

Source: Brandon McKoy, New Jersey Policy Perspective (NJPP), April 2016

From the summary:
New Jersey would have a stronger economy and healthier people if every working man and woman could take days off when they are sick without forfeiting their pay or, sometimes, their jobs. Today, though, over 1 million New Jerseyans – most of whom work in low-wage jobs – don’t get paid when they have to take off for being sick. But earned sick days don’t only benefit working people; they help employers too. By investing in their workers, business owners reap the benefits of a more productive workforce and with lower employee turnover that is both expensive and disruptive. … Claims by the opponents of pending legislation that giving workers earned sick days would hurt the economy don’t hold up. The experiences in numerous cities, states and countries have been just the opposite. Of the 22 most developed nations in the world, only the United States doesn’t require that all working people are entitled to earned sick days. Several cities and states across the country require earned sick days, without any harm to their economies. Often, business owners have come to favor mandatory sick days once they are implemented, as they find the policy helps their workers stay healthy and be more productive. In cities with the longest experience like San Francisco and Seattle, and elsewhere, their economies have improved after earned sick days were mandated, showing that the policy doesn’t hurt jobs and businesses…..

Early analysis of Seattle’s $15 wage law: Effect on prices minimal one year after implementation

Source: Peter Kelley, University of Washington, Press Release, April 18, 2016

Most Seattle employers surveyed in a University of Washington-led study said in 2015 that they expected to raise prices on goods and services to compensate for the city’s move to a $15 per hour minimum wage.
But a year after the law’s April 2015 implementation, the study indicates such increases don’t seem to be happening.

The interdisciplinary Seattle Minimum Wage Study team, centered in the Evans School for Public Policy & Governance surveyed employers and workers and scanned area commodity and service prices. The team’s report found “little or no evidence” of price increases in Seattle relative to other areas, its report states….

Related:
Report on Baseline Employer Survey and Worker Interviews
Source: Seattle Minimum Wage Study Team, University of Washington, 2016
Presentation – Minimum Wage
Source: Seattle Minimum Wage Study Team, University of Washington, 2016

The Minimum Wage Study
Source: University of Washington, 2016

The Minimum Wage Study is a research effort dedicated to providing rigorous analysis of the impact of minimum wage ordinances in metropolitan regions and states. We seek to provide insights that will be useful for policymakers and scholars. As more states and localities move forward with plans to raise the minimum wage, this research will infuse the debate with data on the effects on workers, households, employers, and the local economy. We focus our analysis on the impacts of recently passed ordinances in Seattle and Chicago, as well as other areas.

One of the most popular arguments against raising the minimum wage is getting demolished
Source: David Dayen, Salon, April 26, 2016
Critics of a $15 min. wage say that it will increase prices & put companies out of business. Only one problem…

The power of parity: Advancing women’s equality in the United States

Source: Kweilin Ellingrud, Anu Madgavkar, James Manyika, Jonathan Woetzel, Vivian Riefberg, Mekala Krishnan, and Mili Seoni, McKinsey Global Institute, April 2016

From the summary:
The United States could add up to $4.3 trillion in annual GDP in 2025 if women attain full gender equality. In a new report, The power of parity: Advancing women’s equality in the United States, the McKinsey Global Institute (MGI) finds that every US state and city can add at least 5 percent to their GDP in that period by advancing the economic potential of women. Half of US states have the potential to add more than 10 percent, and the country’s 50 largest cities can increase GDP by 6 to 13 percent.

While the barriers hindering women from fully participating in the labor market make it unlikely that they will attain full gender equality within a decade, the report finds that in a best-in-class scenario—in which each US state matches the state with the fastest rate of improvement toward gender parity in work over the past decade—some $2.1 trillion of incremental GDP could be added in 2025. That is 10 percent higher than in a business-as-usual scenario…..